MUMBAI, Dec 19 (Reuters) - India guar seed futures extended losses from the previous day on Friday on an expected drop in guar-gum exports as a sharp drop in crude oil prices may cut new oil exploration projects, analysts said.
Guar gum is used as a controlling agent in oil wells to facilitate easy drilling and prevent fluid loss.
"Oil prices have tumbled and in this scenario nobody will go for new exploration," an analyst at Religare Commodities Ltd. said.
Oil fell below $34 on Friday to its lowest level in almost five years as the global economic slowdown overshadowed OPEC's record supply cuts. See [ID:nSP402621]
India accounts for 80 percent of world trade in guar gum.
The gum, an extract of the guar bean, is also used in dairy products such as yoghurt, soft cheeses and ice cream -- as well as in bread, pasta, ham, sausages, prepared fish and pastries.
The benchmark January contract on the National Commodity and Derivatives Exchange (NCDEX) has fallen 36 percent since hitting a high of 2,327 on July 22.
Thin arrivals in the physical market capped losses, said an analyst at Mumbai-based commodity brokerage.
In Bikaner, a major spot market in Rajasthan, prices dropped 24 rupees to 1,481 rupees.
Following are the closing prices of guar seed and guar gum futures in rupees per 100 kg on the NCDEX <0#NGG:> <0#NGU:>:
Contract Reuters code Closing price Change in %
Jan NGUF9 1,487 -1.13
March NGUH9 1,540 -1.28
Jan NGGF9 3,464 -1.02
(Reporting by Rajendra Jadhav; Editing by Harish Nambiar)
Trending On Reuters
India will issue a new decree this week for land purchases that has stirred disquiet across the country but which the government says is necessary to build roads, ports and power stations for higher economic growth. Full Article